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Never Again: How a ‘Lesson of 2011’ Shaped Biden’s Non-Negotiating Stance on Debt Limit


WASHINGTON — In 2011, after faltering debt limit negotiations with House Republicans pushed the US to the brink of economic disaster, President Barack Obama and Vice President Joe Biden sat by the fireplace in the Oval Office, with their top aides on the couch. Although they were relieved to have narrowly averted disaster, they were stunned by what had happened.

Obama and Biden made a vow: never again.

They agreed that going forward “no one can use the threat of default or not raising the debt limit as a bargaining tool,” said a former Obama official involved in the fiscal discussions, speaking of the Oval Office meeting. and the “lesson of 2011″. they all discussed. “It made you hold your belly. You couldn’t believe you were in this situation,” the official said.

The US had just undergone its first credit cut. Markets were in turmoil. Consumer and business confidence was shaken. Stocks took a hit. And recovery from the Great Recession was up for debate. Democrats averted the abyss — by acceding to $2 trillion in cuts demanded by the GOP after negotiations on a “grand deal” fell through — but Obama and Biden agreed that the threat of default alone was a serious threat. took a toll.

“They said, this is the sad lesson we’ve learned,” said the Obama official, describing the mood in the room. “It was an unimaginable self-inflicted wound in 2011.”

Twelve years later, Biden is enacting that lesson as he faces a new Republican-controlled House similarly demanding spending cuts as a concession for extending the debt ceiling. He says there will be no negotiations and Congress should allow the government to pay its bills. “I will not allow anyone to use the full faith and credit of the United States as a bargaining chip,” Biden said in Virginia on Thursday.

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His stance has been rebuked by House Speaker Kevin McCarthy, who said he was “disappointed” but remained firm in his call for cuts. As in 2011, the GOP speaker leads a House majority full of ideologically driven conservatives who want to use the debt limit as leverage to force budget changes on a Democrat-led Senate and White House.

Speaker of the House Kevin McCarthy speaks at a press conference at the Capitol (Drew Angerer/Getty Images file)

“Here’s the leader of the free world banging the table, being irresponsible and saying ‘no, no, no, just raise the limit, let’s spend more.’ No. Adults don’t act that way,” McCarthy told reporters at the Capitol last week. “Let’s find common ground, and let’s eliminate wasteful spending to protect hard-working taxpayers.

“So the longer he waits, the more he puts America’s fiscal peril up for grabs.”

The deadlock raises the stakes for Biden and Republicans ahead of what the Treasury Department says is a June 5 UKTN to act or risk default. Democratic leaders in the House and Senate are backing Biden and demanding that McCarthy present his plan and pass it through the House before discussions take place. It puts the debate on a different track from 2011, when Obama tried to broker a budget deal with Republicans in exchange for raising the debt limit, which faltered several times and brought the US within days of default. It is unclear how this ends.

David Schnittger, who served as deputy chief of staff to then-Speaker John Boehner, recalled that in 2011, House Republicans could force the White House to come to the table by getting enough votes behind their opening bid: a raise in the debt ceiling. to an amendment to the balanced budget.

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“It is possible that we will eventually see House Republicans create a plan to address both the debt limit and the spending problem. That’s what the House GOP majority did in 2011 with the cut, cap and balance proposal,” Schnittger said in an email. He argued that the law requiring Congress to raise the debt ceiling, rather than raising it automatically, exists to “force a discussion or negotiation” over fiscal policy when debts pile up.

It’s unclear whether McCarthy can find 218 Republican votes for his own bill in his narrow majority in the House. And so far the Republicans have no uniform plan regarding the spending they want to cut.

After 2011, the Obama White House drew a hard line when the debt limit UKTN came again in early 2013. Then-White House spokesman Jay Carney said in January of that year, “Congress can pay its bills or it can fail to act and default the nation.”

House Republicans relented and added a debt limit extension to a symbolic measure calling for a budget to be passed.

Under that stance, Congress, under a GOP-led house, extended the debt limit three more times — in October 2013, February 2014, and November 2015 — either with a token add-on or a bipartisan budget agreed upon by both sides. The threat of default was off the table. Spending rose again during that period, with Democrats seeking more domestic money and Republicans backing more military funding.

Image: Joe Biden (Andrew Harnik/AP)

Image: Joe Biden (Andrew Harnik/UKTN)

When asked about Biden’s stance and the GOP’s criticism, the White House said the president “will not take a back seat” in pursuing bipartisanship, but said the non-negotiation stance on the debt limit from 2013 passed used to be.

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“Asking why it’s been 12 years since the Democrats stopped paying ransoms in exchange for the Republicans not causing an economic crisis is a self-defeating question,” White House spokesman Andrew Bates told NBC News. “In 2011, the Obama-Biden administration negotiated in good faith, but the recklessness of Congressional Republicans dealt a historic blow to our economy. That is why the administration did not negotiate in 2013 or after.”

Dan Pfeiffer, a senior Obama White House aide from 2009 to 2015, said Biden is “definitely” making the right call in refusing to “let an extremist minority use a possible bankruptcy” to impose bad policies.

“Everyone seems to have forgotten that there was a deadlock over the debt limit in 2013, with Obama taking the non-negotiation approach and triumphing with a clean debt limit,” he said.

Biden’s landscape contains similarities and differences with Obama’s. Boehner had a large majority in the House in 2011 and could afford many dropouts; today McCarthy can only miss four votes. The GOP is now more divided on whether or not to cut spending on Social Security and Medicare. And Senate Minority Leader Mitch McConnell, who was instrumental in the 2011 talks, now places the responsibility on McCarthy to find a way forward.

“John Boehner was a weak leader, but he really wanted to avoid defaulting. It is not clear that McCarthy knows what is really at stake or that he has the savvy to avoid default,” Pfeiffer said in an email.

“On the plus side,” he said, Democrats could try to force a vote on the debt ceiling if just a few Republicans get nervous about the possibility of default. “The slim majority means that if a clean bill ever comes along, you only need a small handful of Republican votes to avoid a default.”

This article was originally published on NBCNews.com